Gold soared 2.5% on Friday to almost $1,200 per ounce as fund buying, short covering and the sudden weakening of the dollar offset the better-than-expected US data that reduced the demand for the metal
Bullion rose more than $40 to a high of two weeks at $1,193.34 after it dropped more than 1% in early trade testing the level of $1,145.
Reuters quoted Vision Financial Markets director of metals, David Meger as having said, “The early morning pressure was met with significant bargain-hunting and when the market was unable to continue its move lower, short-covering ensued.”
Gold had dropped early after a report by the Commerce Department that US retail sales had increase 0.5% in October, indicating that American consumers are spending more gusto and might assist the economy growing at a fast pace.
December delivery gold, the most active contract, climbed 2.1% or $24.10 settling at $1,185 per troy ounce on the Comex of the New York Mercantile Exchange. This was the highest since October 30.
Thomas Capalbo, broker with Newedge New York said that bursts of high volume trading once the prices went above $1,160 per ounce showed that stop-loss orders were being triggered. He said, “Everyone is looking at the same charts and the same indicators so people are going to put their stops in the same places.”
Senior commodities broker at RJO Futures, Bob Haberkorn said that investors were choosing to lock in gains on bearish bets ahead of the weekend with prices of gold having moved lower the past weeks.
He said, ‘You have two days when the markets aren’t going to be open, and people are hesitant to keep large positions open in case something happens.”
As reported by The Wall Street Journal, December delivery silver gained 4.4% to $16.314 per troy ounce, the highest since October 30.
Palladium dropped 0.2% to $764.72 per ounce.
Platinum rose 1.5% to $1,209.49 per ounce after touching a low of five years at $1,171.10.
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